Deferred taxes for the travel industry? Trump Administration officials are floating the idea of deferring taxes on industries being hard hit by the coronavirus outbreak, including airlines and hotels. The messaging is complicated since President Trump consistently downplays the effects of the epidemic—and because his own hotels might benefit from the tax break.
Charitable giving seems to have fallen in 2018, despite Treasury claims. TPC’s Gene Steuerle examines a Treasury Department press release that claimed charitable giving 2018 “appeared largely unchanged from previous years” despite a significant decline in tax benefits after passage of the Tax Cuts and Jobs Act. TPC and others projected that giving as a share of income would decline by roughly 4 to 5.5 percentage points because the government subsidy to the average dollar of giving declined by about 7 percentage points. Treasury estimated that adjusted gross income rose by between 5 and 6 percentage points from 2017 to 2018. Thus total giving would have had to increase by the same percentage if donations were to be “largely unchanged.” It did not. Concludes Steuerle: “Sadly, Treasury seems more focused on spin than objective analysis.”
Virginia’s gasoline tax may soon rise. Democratic Governor Ralph Northam has proposed a 5-cent per gallon increase to the state tax in 2021, plus another nickel in 2022. The tax currently is just shy of 22 cents per gallon. Lawmakers will consider the tax hike this week. The additional revenue would pay for road maintenance and improvements, as well as bridges and public transportation.
Might a state gas tax climb in Utah, too? Republican Governor Gary Herbert wants the legislature to consider raising the gasoline tax to replenish the state’s road and general funds. But lawmakers instead are considering a small income tax cut because Utah typically takes in $20 million more in taxes than it has budgeted for education use. But Herbert wants to hold off until the legislature considers tax reform in 2021. “Why give a tax cut now,” he asks.
“The tax code is overtaxed.” The New York Times takes a look at how the Internal Revenue Code distributes a broad range of social assistance to taxpayers. Former National Taxpayer Advocate Nina Olson told the Times,“The problem with the creep of social benefits into the Internal Revenue Code is that … You have a tax-enforcement-minded agency administering a benefits program.” Tax expenditures are easier to swallow, politically, than social welfare spending programs, explained former IRS commissioner Mark W. Everson.
IRS names a director of new fraud enforcement office. Damon Rowe, a long-time staffer at the IRS criminal investigation division, will lead a new fraud enforcement office beginning in mid-March. Rowe will oversee IRS initiatives relating to both criminal and civil tax fraud and advise senior IRS officials on fraud enforcement policy issues. The office will have about 70 employees and will be funded through the IRS enforcement budget.
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